{"id":1892,"date":"2021-05-13T08:42:12","date_gmt":"2021-05-13T08:42:12","guid":{"rendered":"https:\/\/campus.hesge.ch\/commodity-trading\/?p=1892"},"modified":"2021-05-14T06:35:44","modified_gmt":"2021-05-14T06:35:44","slug":"olam-buys-us-spice-group-as-it-weighs-food-ingredients-ipo","status":"publish","type":"post","link":"https:\/\/campus.hesge.ch\/commodity-trading\/olam-buys-us-spice-group-as-it-weighs-food-ingredients-ipo\/","title":{"rendered":"Olam buys US spice group as it weighs food ingredients IPO"},"content":{"rendered":"

https:\/\/www.ft.com\/content\/f98ef068-62aa-422e-9408-b4fc630d4a3f<\/a><\/p>\n

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Olam International has bought US spice company Olde Thompson for almost $1bn as the Singapore-based agricultural trading house looks to list its food ingredient business.<\/p>\n

The company announced a split last year into one business focused on food ingredients such as cocoa, coffee, nuts and spices, and another on bulk agricultural commodities such as grains and oilseeds.<\/p>\n

A Shekhar, chief executive of Olam Food Ingredients, said it was considering a listing next year to boost growth as it rides a wave of consumer interest in health, taste and sustainability. London, Amsterdam and Zurich are among the exchanges under consideration.<\/p>\n

\u201cEurope has three or four options which have the size and liquidity,\u201d Shekhar told the Financial Times. \u201cWe think this is a fairly unique business.\u201d OFI is one of the world\u2019s biggest suppliers of cocoa beans, garlic, instant coffee and cashew nuts.<\/p>\n

Shekhar said Olam would have completely \u201ccarved out\u201d and separated OFI by January and that the demerger would follow \u201cmost likely\u201d in the second quarter of 2022. \u201cWe are looking at all the major venues,\u201d he said, adding that Olam would seek a main market listing to appeal to a broad range of investors including index tracking funds. To qualify for a premium listing on the London Stock Exchange, for example, companies are required to have a free float of at least 25 per cent.<\/p>\n

\u201cIn the next couple of months we will be making a final call. We have the main exchanges under evaluation right now,\u201d Shekhar said. \u201cWe are having a lot of conversations.\u201d<\/p>\n

At the same time as the demerger, OFI will raise capital to \u201cback growth over the next three to five years\u201d, said Shekhar, who joined Olam in 1992 and was previously its chief operating officer.<\/p>\n

\u201cWe have a plan and this [spice acquisition] highlights the kind of possibilities we have identified, he said. OFI is being advised on the demerger by Credit Suisse and Rothschild.<\/p>\n

With a presence across the supply chain from production to trading and manufacturing, OFI is looking to respond to the rising need from retail and food industry customers for sustainable and traceable products.<\/p>\n

OFI, which reported S$771m (US$582m) in earnings before interest and tax last year on sales of S$12.5bn, paid $950m including debt for Olde Thompson, the largest private-label spice supplier in the US.<\/p>\n

It bought the spice group from Kainos Capital, a midsized private equity group specialising in the food and consumer sectors that has owned the California-based company since 2018, along with the founding family.<\/p>\n

Shekhar pointed to growing consumer appetite for herbs and seasonings that enhance taste and flavour in a healthy way, for example dried onions that reduce the need for salt. \u201cThat is becoming huge,\u201d he said. \u201cWe all want health and wellness but we don\u2019t want it at the cost of taste and flavour.\u201d<\/p>\n

Food companies are expecting a rebound in restaurant demand and sustained strength in retail sales. However, there are signs of stress in supply chains as agricultural commodity prices rise and the continued impact of this month\u2019s Suez Canal blockage adds to disruption caused by the pandemic.<\/p>\n

Shekhar said container availability issues were unlikely to be resolved before the third quarter of this year.<\/p>\n","protected":false},"excerpt":{"rendered":"

https:\/\/www.ft.com\/content\/f98ef068-62aa-422e-9408-b4fc630d4a3f Olam International has bought US spice company Olde Thompson for almost $1bn as the Singapore-based agricultural trading house looks to list its food ingredient business. The company announced a split last year into one business focused on food ingredients such as cocoa, coffee, nuts and spices, and another on bulk agricultural commodities such as … <\/p>\n

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